In the Studio: Gen-Probe CEO Henry Nordhoff

After Gen-Probe’s trial of a new HPV test was pushed back a quarter and the company’s food-testing collaboration with 3M fell apart, the stock slid from $72 to $65, where it closed today. But, like any CEO quick to defend his company, Henry L. Nordhoff told Cramer on Mad Money Wednesday that there were more reasons to like the diagnostic firm’s prospect than not.

“We just had a difference of opinion,” Nordhoff said of 3M . Turns out 3M thought that, when both its and Gen-Probe’s profits were added to the cost of making its food-testing product, the price point would be too high. (3M already has a product at a lower price.) But Nordhoff disagreed. About half of all food processors in the business hold inventory while they’re waiting for test results, he said. So these companies would be willing to pay a bit more to offset the cost of food going bad as a result of delays.

As for the HPV test, it’s an issue “only because the FDA has changed the rules again,” the CEO said. “They’re trying to come up with a gold standard” for HPV testing. GPRO’s test would be the second on the market, and, usually, the Food & Drug Administration approves the number-two product as long as it’s better, or at least the same, as the first. Still, the one-quarter pushback “may not affect the outcome,” Nordhoff said, “so we may still be able to hit our deadline.”

All this negativity is already priced into the stock, Cramer pointed out. But two coming tests for prostate cancer are not: one for early detection and the other for post-diagnosis to see how aggressive the cancer is.

The early-detection test is supposed to be better than the current PSA test, which has a positive predictive value of 25%, Nordhoff said. The Gen-Probe test’s value is 75%. The product isn’t approved in the U.S. yet, but the CEO expects it to happen, which is good news since the market for the test is “huge,” the Nordhoff said.

Cramer called Gen-Probe an “exciting story.” The stock is a must for any portfolio in need of a strong defensive play.